New National Security Guidelines Will Complicate Foreign Investments

New guidelines under the Investment Canada Act (“ICA”) now mandate a national security review of a wider range of acquisitions by non Canadians in certain sectors, or by state owned or state influenced enterprises. The new guidelines signal that Canada is NOT “open for business” as governments have preferred to boast.

Canada is acting in lock step with other countries concerned about certain foreign actors (state owned or state influenced) and the targeting by foreign buyers of sensitive sectors or technologies. Companies should note that areas identified as presenting national security concerns now include sensitive personal data, critical minerals and sensitive technologies (see Annex A). A review can result in undertakings or rejection of the proposed transaction. Deals can also be unwound.

The new guidelines were preceded by guidelines last Spring subjecting investments in critical goods and services in the health sector to enhanced scrutiny under the Investment Canada Act. These remain in effect (vaccine production or the lack of it is a whole other story).

The new provisions aim to protect Canadian companies which possess sensitive personal data or develop and manufacture sensitive technologies that form part of critical supply chains. Factors to be considered in a national security review process include: impact on defence capabilities and interests, transfer of sensitive technology, goods under the Defence Production Act, impacts on the supply of critical goods and services, impact on critical minerals, security of critical infrastructure, potential to enable foreign surveillance (read Huawei) and impact on foreign relationships. An interesting factor on this list is the potential for the investment to enable access to personal data including health, financial and communications data. This list of factors is a guide only as the government has reserved the right to look to additional concerns.

The national security review is in addition to any “net benefit” review that might be required under the ICA. A national security review is not related to the dollar threshold of a investment.

The new guidelines can be found here.

The government is also moving to protect Canada’s research ecosystem to balance openness to collaboration with appropriate safeguards for Canadian researchers, knowledge, data and intellectual property. These provisions may be found here.

For more information, please contact:

Barry Campbell: barry@campbellstrategies.com

Photo of author
About the Author

Related Blog Posts

Cabinet Jenga on The Rideau

Refashioning a Cabinet mid-way through a Government’s mandate is not unlike a game of Jenga. Something’s gotta give to get things moving: a retirement, a…

Read More >: Cabinet Jenga on The Rideau

The Toronto Mayoral Election That Was: An Analysis

 One day after the New York Times wrote a piece saying that Toronto had gone from ‘a city that works’ to a ‘city in crisis’…

Read More >: The Toronto Mayoral Election That Was: An Analysis

Toronto’s Mayoral Race: Good Morning, Toronto

Next Tuesday morning Toronto will awake to a new mayor. And, if all the polling is accurate, that mayor will be Olivia Chow. The notion…

Read More >: Toronto’s Mayoral Race: Good Morning, Toronto

Crypto Won’t Stay Dead: A Conundrum for Regulators and Central Bankers. An Opportunity for Canada.

The demise of “crypto exchange” FTX (only a short time ago), and the resulting collapse in the value of crypto, may have been greeted by…

Read More >: Crypto Won’t Stay Dead: A Conundrum for Regulators and Central Bankers. An Opportunity for Canada.

Budget 2023: Big Spending To Placate The NDP and Confront A Competitive And Dangerous World 

The NDP are the big winners in Budget 2023. The Liberals have delivered what the NDP needs to continue to shore up the Minority Liberals:…

Read More >: Budget 2023: Big Spending To Placate The NDP and Confront A Competitive And Dangerous World 

Ontario Budget 2023: A Budget for Uncertain Times

The Ford government released its 2023 Fiscal Plan with very little of the “pre-conditioning” announcements that have been de rigueur for governments of all stripes…

Read More >: Ontario Budget 2023: A Budget for Uncertain Times

The Federal Mini Budget: Keeping Their Powder Dry, Not So Much

The federal government delivered a Fall Economic Statement this week. These Statements have morphed into ‘mini budgets’ full of pricey ‘goodies’ that used to be…

Read More >: The Federal Mini Budget: Keeping Their Powder Dry, Not So Much

What happened?: Analysis of the 2022 Ontario Election and its meaning for the parties

In one of the strangest elections in recent Ontario history, voters gave Doug Ford’s Conservatives a resounding victory with an even stronger majority in the…

Read More >: What happened?: Analysis of the 2022 Ontario Election and its meaning for the parties

Ontario Budget 2022: Analysis – A campaign budget to differentiate the Conservatives from the Opposition Parties

With mere days to spare, the Ford government released the 2022 Ontario Provincial Budget which will serve as the basis of their election platform. While almost…

Read More >: Ontario Budget 2022: Analysis – A campaign budget to differentiate the Conservatives from the Opposition Parties